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    Saturday, May 11, 2024

    CuriousCT: Tribes' slot payments end up in state's General Fund, municipal coffers

    A CuriousCT respondent who wished to remain anonymous suggested The Day provide a “thorough accounting” of the slot-machine revenue the Mashantucket Pequot and Mohegan tribes have been forking over to the state for the better part of three decades.

    It does seem reasonable to ask where that $8 billion has gone.

    The simple answer is that the state’s 25-percent share of the gross slots revenue generated by the tribes’ respective casinos — Foxwoods and Mohegan Sun — has been deposited year after year — actually, month after month — into Connecticut’s General Fund along with all the other taxes, fees and other sources of revenue the state collects.

    The General Fund, in turn, is appropriated for all manner of spending.

    One of the things the General Fund funds is the Mashantucket Pequot and Mohegan Fund, which has provided grants to the state’s 169 cities and towns.

    [naviga:img src="https://projects.theday.com/charts/slot_mp_m_fund_1994-2019.jpg" alt="" align="middle" width="663" height="499" border="0" vspace="5" hspace="5"/]

    So, the best we can do is track how much slots revenue has been diverted to local budgets each year. Has the Mashantucket Pequot and Mohegan Fund fluctuated with the rise and fall of the casinos’ contributions to the General Fund? Or, has the fund followed a separate trajectory?

    Let’s start at the beginning.

    The fund, originally known as the Mashantucket Pequot Fund, was established by the legislature in 1993 in connection with Foxwoods’ introduction of slots. Mohegan Sun followed suit four years later, at which time the name of the fund was changed.

    In the fund’s first year — the fiscal year ending June 30, 1994 — Foxwoods paid $113 million in slots revenue to the state, which doled out $88.1 million to municipalities — nearly 78 percent of the slots contribution.

    In no year since has the fund come close to distributing that high a percentage of slots revenue.

    In fiscal 2019, with the casinos’ slots contribution falling to $255.2 million, the lowest total since fiscal 1998, the fund doled out $49.9 million, the smallest amount ever and slightly less than 20 percent of the slots contribution.

    The casinos’ slots payments reached their high point in fiscal year 2007: $430.5 million. The fund that year held $91.1 million, about 21 percent of the slots payments.

    [naviga:img src="https://projects.theday.com/charts/mp_m_fund_1994-2019_as_percent.jpg" alt="" align="middle" width="663" height="499" border="0" vspace="5" hspace="5"/]

    Clearly, though the fund has decreased over time, it has been stable for periods.

    From fiscal years 1998 through 2002, a stretch in which the casinos’ slots contributions steadily climbed, the fund stayed between $130 million and $135 million a year. When the slots contributions plummeted from $359.6 million in fiscal 2011 to $265.9 million in fiscal 2016, the fund annually remained at or near $61.8 million.

    So, what determines the size of the fund and how it gets divvied up among the state’s municipalities?

    The answer is that it’s complicated and the relevant criteria have been tweaked over the years.

    “By law, the Mashantucket Pequot and Mohegan Fund is a separate, nonlapsing fund whose revenue derives from tribal casino video facsimile (slots) revenue pursuant to a memorandum of understanding that each tribe has with the state,” a July report prepared by the state Office of Legislative Research says. “Each year, the General Assembly must transfer from the General Fund to the Mashantucket Pequot and Mohegan Fund, an amount equal to the amount appropriated for grants to municipalities, for the Office of Policy and Management to distribute.”

    The law dictating how the fund must be distributed specifies a number of formulas that apply to portions of the fund. The formulas pertain to each municipality’s eligibility for state payments in lieu of taxes, or PILOT, grants for state-owned real property and tribal reservation land; real property owned by private, nonprofit colleges and nonprofit general hospitals; equalized net grand list; per capita income in relation to other municipalities; and population.

    By law, a portion of the fund is directed to 10 municipalities, including New London, for local property tax relief. Another provision calls for the distribution of a piece of the pie to 28 municipalities, including a half-dozen in southeastern Connecticut.

    The five towns nearest the casinos — Ledyard, Montville, North Stonington, Norwich and Preston — each get an additional $750,000.

    In the last five full fiscal years reviewed in the legislative report — fiscal years 2014 through 2018 — the Mashantucket Pequot and Mohegan Fund distributed a total of $300.8 million, an average of nearly $60.2 million a year. Over that period, Norwich received $9.8 million; New London, $8.9 million, and Groton, $6.8 million.

    Connecticut’s three biggest cities benefitted the most from the fund over the five years, with Hartford receiving $32.5 million, New Haven $31.7 million and Bridgeport $30.4 million.

    b.hallenbeck@theday.com

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